Nguyen Tan Dung: The Driving Force Behind Vietnam's Transformation

The road to reform is always fraught with obstacles and minefields. The people of Vietnam understand these all too well. They have a great deal of experience with both. From our snug perch in the West, it is far too easy for us to express righteous indignation at the"slow" pace of structural and institutional reform in Vietnam.

Daniel D. Veniez
Entrepreneur and Corporate Director; Liberal Party of Canada Candidate in the 2011 General Election

HANOI - The road to reform is always fraught with obstacles and minefields. The people of Vietnam understand these all too well. They have a great deal of experience with both.

From our snug perch in the West, it is far too easy for us to express righteous indignation at the"slow" pace of structural and institutional reform in Vietnam. Historical perspective has never been our strong suit.

The past hundred years has been one continuous and painful struggle for the Vietnamese. Millions died and were maimed in the Vietnam War. The ghastly legacy of Agent Orange takes the lives of suffering victims and their families to this day. The horrific human toll is unquantifiable. The Americans left Saigon in 1974 after reducing 95 per cent of the national infrastructure to rubble. A massive power vacuum, a settling of accounts, political turmoil, and a refugee crisis and brain drain lasted a decade. Even before the "American War," as they call it here, the Vietnamese fought a protracted series of grisly conflicts with the French, and engaged in skirmishes with neighbours, including China.

Despite their recent history, the Vietnamese are a peaceful people of a rich culture that spans thousands of years. While they never sought to fight, they never back away from one. That is especially true in defense of their independence and right to self-determination.

When one travels through the vibrant streets and villages in cities and throughout the countryside, this tumultuous past feels like ancient history. Today's Vietnam is firmly on track in the most transformative period in its long history. The trajectory of this country of 90-million people is spectacular. Vietnam is undergoing a profound institutional, legislative, economic, and cultural rewiring.

Responsibility for shepherding this the country through this journey of staggering complexity has fallen to Prime Minister Nguyen Tan Dung. History will be the ultimate judge of how successful he has been. There can be little doubt, however, that Dung is in choppy waters, with pressures coming from all directions. He's navigating an ambitious reform agenda that is steeped in the deep contradictions inherent in a one-party state.

Much like China's great reformer, Deng Xiao Ping, shaping a modern, confident, and prosperous Vietnam is fundamental to Dung's mission.

A little more than a year after being elected Prime Minister in 2006 by the National Assembly, Dung, a reformer, confronted the damage wrought by the economic and social policies that had stunted Vietnam's growth. He ushered Vietnam's admission to the World Trade Organization in 2007, itself that is major accomplishment. Opening trade relations with the West, gradually liberalizing the economy, and driving an internal reform agenda, Dung's policies have lifted millions out of poverty.

According to the International Monetary Fund, in 2005 GDP per capita in Vietnam was (USD) $699. In October 2013, the IMF reported it to have increased to (USD) $1,896, a remarkable increase of 171 per cent. With that kind of growth, inflation was a real danger, and in 2009 it reached a whopping 25 per cent. Dung reigned in spending and tightened monetary policy. Today, it is less that 7 per cent.

In the midst of the global recession in 2009, Dung approved an $8-billion stimulus package for needed infrastructure investments. While that's a fraction of what Vietnam needs, it has set the setting the stage for the recovery that's underway. In 2012 Vietnam's economy grow by another 5.4 per cent, and its GDP hit a whopping $141 billion. The country's GDP saw an increase of 5.42 per cent in 2013. While not as high as neighbouring countries, the news of Vietnam's GDP growth was met with optimism, especially when the consumer price index (CPI) is taken into account. The CPI is at just 6.04 per cent, the lowest rate the country has had in a decade.

"The Mekong region, led by Vietnam, is evolving into a strategic manufacturing destination for multinational corporations," said Eugenia Victorino, a Singapore-based economist at Australia & New Zealand Banking Group Ltd. Intel, for example, recently invested over $1 billion in a new plant.

On the surface, Dung and his colleagues faced daunting challenges. Although literacy rates are above 93 per cent, Vietnam's young work force must tool up for the 21st century economy. At the same time, policymakers must synchronize measures to attract new foreign investment, improve productivity and efficiency, modernize the institutions of governance, reform state owned enterprises, build-up the national infrastructure, and repair the balance sheets of troubled banks. And that's only for starters. With China flexing its military muscles to assert itself as the dominant power in the region, tensions have risen in the South China Sea.

Hanoi's critics point to the frustratingly slow pace of reform, censorship, and an entrenched system of corruption. To the outsider, these arguments are not entirely without merit. Yet, you have to wonder where Vietnam would be today without the shrewd finesse, patient resolve, and steadfast determination to secure a peaceful future of Prime Minister Nguyen Tan Dung

Like the rest of Asia, last week the Vietnamese paused for the celebration of the lunar new-year, which is known here as "Tet." As the people of Vietnam reflect on the recent past they know how far they've come and how much progress they've made. And as they ponder the promise of their collective future, they also know there's much still to be done.